Rural areas have slightly higher numbers of family physicians per capita. But they lag metropolitan areas in internal medicine physicians, pediatricians, nurse practitioners, and physician assistants, according to University of Washington policy brief. Metropolitan areas have a core urban center of at least 50,000 residents. Micropolitan has a core urban center of 10,000 to 49,999. Non-Core counties have no urbanized core greater than 10,000 residents.

The federal Rural Health Clinic (RHC) Program, established in 1977, pioneered important new approaches to providing and paying for healthcare in rural areas. Targeting rural Medicare and Medicaid beneficiaries with inadequate access to primary care services, the RHC Program introduced rural-relevant policy tools including cost-based reimbursement for small primary care providers and a team-based care model that partnered nurse practitioners and physician assistants with primary-care physicians as a requirement for recognition as a Rural Health Clinic. Since the program’s inception, Rural Health Clinics have become an important source of primary care with 4,482 RHCs serving 2.17 million Medicare beneficiaries in 2019.The program, however, is showing its age and needs updating to remain relevant and effective in the current health care market.

Despite its success, the challenges underlying the creation of the Program still exist. Twenty-six percent of rural Americans are unable to obtain needed care. They are older, poorer, and sicker with higher rates of chronic illness and worse health outcomes; suffer from higher rates of heart disease, cancer, unintentional injuries, lower respiratory disease, and stroke; and receive fewer wellness and preventive services.

Although Rural Health Clinics remain relevant to the needs of rural areas, the primary care environment has evolved since its inception. Modernizing the program would help Rural Health Clinics to succeed under value-based payment systems that tie reimbursement to the quality of care provided and reward providers for efficiency and effectiveness. This article suggests opportunities to do so by building on its foundation of team-based care and rural-relevant payment models, encouraging Rural Health Clinics to participate in practice transformation and quality reporting initiatives, and enhancing the capacity of the clinics to serve rural communities.

Workforce Challenges

Rural areas face a chronic shortage of primary care services due to an insufficient supply of new primary-care physicians, an aging workforce, and a maldistribution of physicians across urban and rural areas.In 2017, the Government Accounting Office estimated a shortage of more than 20,000 primary-care physicians in rural areas by 2025. In 2020, the Association of American Medical Colleges (AAMC) estimated that this gap could widen to 55,200 by 2033.These estimates do not reflect lower levels of care received by rural populations. To achieve health equity and reach population health goals for body weight, blood pressure, cholesterol, blood glucose, and smoking, the AAMC estimated that an additional 10,130 primary-care physicians are needed in rural areas. Although the growth of new nurse practitioners and physician assistants can potentially offset physician shortages, they are also inequitably distributed across urban and rural areas. Given these projections, new thinking is needed to increase primary care capacity by reallocating clinical responsibilities across an expanded care team comprised of licensed and non-licensed staff.

The Changing Rural Primary Care Environment

As the foundation of a high-performing health system, primary care is necessary to achieve the quadruple aim of health care – enhanced patient experience, better outcomes, lower costs, and improved clinician satisfaction. Rural primary care providers have assumed a greater role in providing essential services including mental health, substance use, and chronic care management as well as supporting population health by providing wellness services, immunizations, counseling, screening for asymptomatic disease, and preventive care to assist patients in avoiding preventable conditions. The use of electronic health records, patient registries, and digital health, including telehealth, to provide services has grown dramatically as has interest in team-based care, including the use of community health workers, and an emphasis on value instead of volume.

(Graphic: University of Washington Rural Health Research Center,

RHCs have historically been exempt from Medicare quality reporting programs such as the Merit-Based Incentive Payment System. The cost of training new staff, updating electronic health records, and implementing new quality measures have further hindered Rural Health Clinics’ participation in these new models of care.

Modernizing the RHC Program

The Rural Health Clinic Program provides an ideal platform to test new models of rural primary care by:

  • Implementing team-based care models that allow Rural Health Clinics to rationalize their workflows by delegating clinical tasks across a diverse team of licensed and non-licensed clinical colleagues based on the scope of their licenses and/or skills sets. Teams may include physicians, PAs, nurse practitioners, pharmacists, behavioral health providers, nutritionists, nurses, care managers, medical assistants, and community-health workers.
  • Incentivizing the delivery of high-value services (mental health, substance use, chronic care management, prevention/wellness, and public health) by designating them as RHC primary care services.
  • Reviewing Rural Health Clinics’ guidance and policies to modernize program performance and eliminate unnecessary and outdated regulatory barriers.
  • Enacting payment reform to support team-based care, use of community-health workers, and delivery of essential services by lessening the reliance on fee-for-service volume, contributing to fixed costs, encouraging provision of population and public health services, expanding telehealth use, and incentivizing RHCs to report quality and performance data. A hybrid reimbursement formula involving fee-for service, capitated (a per member population health fee), and pay-for performance funding streams for Medicare and Medicaid patients could support these goals. Ultimately, this model could be migrated to a comprehensive population-based payment model.
  • Implementing a national data system to monitor RHC quality, financial, and safety net (service to low income and vulnerable populations) performance using a standardized set of RHC measures relevant to their performance.
  • Supporting RHC safety net activities, particularly in communities without traditional safety net providers.
  • Encouraging the Center for Medicare and Medicaid Innovation to develop RHC demonstrations and allow, where appropriate, RHC participation in existing demonstrations and practice transformation initiatives.
  • Including RHCs in Medicare and other quality reporting programs by identifying measures relevant to rural primary care providers.
  • Developing an RHC technical assistance program to assist with practice transformation, improve RHC financial, operational, quality, and population health performance; and adapt to changing delivery system and market demands. The state-based grant program supporting Critical Access Hospitals funded by the Medicare Rural Hospital Flexibility Program provides a model for this program.

These changes, if implemented, would modernize the RHC program, enhance the ability of RHCs to meet the needs of their rural communities, and assist them in the transition to value-based systems of care.

John Gale is senior research associate and director of policy engagement for the Maine Rural Health Research Center within the Population Health & Health Policy Program at the University of Southern Maine’s Cutler Institute.

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